Government gives Charity Commission extra £5m a year funding

The government has announced it will give the Charity Commission a 25 per cent boost to its annual income - £5m a year - to help it respond to increases in demand on its core functions.

But in a statement released today, it said this was an “interim” solution, and that the Commission will continue to work on proposals that would see larger charities being charged to help fund its enabling work.

The Charity Commission has confirmed that the funding will come from HM Treasury. It has not said how many years the additional funding will last for, although it is an interim measure.

The government currently gives the regulator around £20m a year. This is about half what it received in real terms a decade ago.

The regulator still plans to launch a formal consultation later this year on charging large charities for regulation. It has previously indicated that any funding from charging will pay for advice, support and "enabling work", rather than core regulation.

In today’s announcement the Commission said it expects to consult on proposals to raise £7.5m per year from contributions from the 2,000 largest charities, which all have incomes of over £5m.

The announcement also said that the regulator will want to hear “from all charities of all sizes and types” about the kind of enabling work that charities would find helpful.

Minister for civil society: 'Vital work'

Tracey Crouch MP, minister for sport and civil society, said: “The Charity Commission does vital work regulating this vibrant sector and ensuring the public can support charities with confidence.

“I am delighted that this funding will mean the Commission can meet the increasing demands for its services and help charities continue to improve lives up and down the country. It is important that the sector continues to innovate, and this includes the Commission considering a range of funding models for the future.

William Shawcross, chair of the Charity Commission, said: “I am pleased that the additional transitional funding from government acknowledges the unprecedented rise in demand on the Commission’s services in recent years. The new money will help us continue to increase the effectiveness of our core regulatory functions in the short term, as we explore this longer term solutions.

“It is right that we consider whether those in the sector with the broadest shoulders should make a contribution towards aspects of our work, and I am pleased that we will shortly be publishing a consultation on whether and how we do this. We would plan to use these funds to increase and improve the services and support we offer and want to encourage charities to step forward and feed in their thoughts.”

Long-awaited consultation

Under its existing powers the Commission can introduce charges for specific services, but the introduction of any sort of levy system would require primary legislation.

The Commission’s plans to introduce a charging system were first mooted in March 2016 at a Charity Commission public meeting.

Last year the Commission came close to being able to launch the consultation, having gained Treasury approval in March, but it was delayed by the general election and government reshuffle.

Widespread concern

Many charity representative bodies have repeatedly expressed concern about the Commission's plans and last year the House of Lords Select Committee on Charities said the regulator needed to be clearer about its plans.

The Charity Finance Group, Acevo, Navca and the Directory of Social Change have all previously said that they are opposed to the principle of charities paying for the regulator.

Last week the Charities Aid Foundation published a report outlining alternatives to a flat levy, which included the suggestion that the Commission should instead fine charities which file their accounts late.